Defamation Case Against Eliot Spitzer and Slate Dismissed

Libel and slander claims depend to a large extent on whom the plaintiff targeted with the allegedly defamatory statement. Defamatory words may not support a cause of action unless they directly or inferentially refer to the plaintiff–this has come to be known as the “of and concerning” test. The defamation case filed against former Governor Eliot Spitzer and Slate Magazine Slate for a column Mr. Spitzer wrote in 2010 about an insurance bid-rigging scandal was recently dismissed by a New York court on the ground that the article did not sufficiently identify the plaintiff–a former insurance executive at Marsh & McLennan–as the subject of the statements.

William Gilman’s work for Marsh included negotiating “contingent commissions”–fees paid by insurers to insurance brokers who place insurance business with the insurer. As attorney general, Spitzer took the position that Marsh’s use of such commissions was illegal. A lawsuit ensued and Gilman was convicted of one count of restraint of trade and competition. While Gilman’s appeal was pending, the trial judge vacated his conviction because exculpatory evidence had not been disclosed during trial. Spitzer wrote an article published on Slate.com in response to a Wall Street Journal article criticizing his handling of the Marsh case. Gilman brought a claim for defamation against Spitzer and Slate based on statements in Spitzer’s article.

Gilman’s defamation claim was based on (1) a reference to “the many employees of Marsh who have been convicted and sentenced to jail terms” and (2) the statement that Marsh’s employees “pocketed … increased fees and kickbacks.” Defendants argued that neither of the challenged statements was “of and concerning” Gilman and therefore could not be defamatory.

Whether a statement is “of and concerning” the plaintiff is a question of law for the court to determine at the pleading stage, considering the challenged words in context and giving the language a natural reading. Because Gilman was not mentioned by name in the article, in order to be defamatory, the language must be such that persons reading it would understand that it refers to Gilman. Gilman argued that a reasonable reader would understand the statement to be about him based on preceding sentences referring to the dismissal of two cases after conviction. The court disagreed and found that no reasonable reader of the entire passage would come away thinking both that Gilman’s case was dismissed after conviction and that he was convicted and jailed on those charges.

Regarding the statement that Marsh’s employees “pocketed … increased fees and kickbacks,” the court noted that statements which refer to an organization do not implicate its members. Gilman argued that the article’s preceding references to the two dismissed cases sufficiently tied him to the statement, but the court found that if anything, the preceding sentences tended to weaken any inference to Gilman. The court also rejected Gilman’s attempt to characterize the challenged statement as referring to only 20 individuals who were subject to prosecution. Courts have allowed defamation claims to proceed where a statement referred generally to a group numbering 25 people or fewer, but the court here found the argument unsupported by the language which referred broadly to “Marsh” and “its employees” rather than to a subset of employees who were subject to prosecution. Finding that the allegedly defamatory statements could not be reasonably interpreted to be “of and concerning” Gilman, the court dismissed the defamation claims.

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